b'The argument being that, if it is to be successful, at least one person or a small nucleus of staff need to concentrate and to be seen concentrating on developing the new companys activities. The costs of staff employed by the council used on company work must be fully recharged to the company. There will be a need to review employment terms and conditions to ensure that they accommodate the new way of working, eg protection of intellectual property rights, working on client sites, etc. There will also be a need to review employee-related insurance cover. Directors 1.14 The company will need to have at least one director. In law, it could be the council itself, but most local authorities have selected members and officers as directors. Often, they receive no remuneration (payment for such roles may bring difficulties for individuals and council alike regarding legislative requirements and potential conflicts of interest) but there will be a need to establish indemnities of members and officers taking on these roles. Assets 1.15 Unless special circumstances apply, tangible fixed assets are normally kept out of the company. Where council assets are used, recharges must be made to the company. This is to protect the council for two principal reasons: first, if the company fails, the proceeds from the sale of those assets would be available to the creditors of the company; and second, if the assets increase in value and are sold, then the profits on disposal, ie capital gains are potentially subject to corporation tax. Avoiding tax leakage is an ever-constant consideration when running a company even where it is wholly owned by a local authority. The company will carry tax liabilities relevant to company status and will not have the beneficial fiscal arrangements that an authority has. Loans 1.16 If new assets are needed, then it is possible for monies to be loaned (typically at market rates to avoid State Aid implications) to the company from the council to finance such assets. 21'